9/03/2009 @ 7:00AM

Japan Fashions Super Chip

A new super central processing unit (CPU), jointly developed by Japan’s big chip makers and funded by the Tokyo government, is coming up to challenge Intel.

Intel’s
engineers might be imagining months of overtime just from hearing the list of allies behind the unprecedented Japanese coalition, which is aimed at inventing an easier and universal software programming across various devices.

The big names in the campaign include Fujitsu,
Toshiba
, Panasonic, Renesas Technology,
NEC
,
Hitachi
and
Canon
, which all agreed to pool their resources together to create a new, standardized, power-saving central processing units (CPU) which could be used within the entire industry for a wide range of consumer electronics by the end of fiscal 2012, the evening edition of Nikkei Business News reported Thursday.

The super CPU project, supported by the Ministry of Economy, Trade and Industry, with an initial capital of 3-4 billion yen, will enable the allied Japanese manufacturers to challenge the dominant market share of Intel in the U.S.

Hironori Kasahara, professor of computer science at Waseda University, is the major designer of the Japan’s super CPU. In the early development stages, each firm will produce its own CPU that is compatable with the innovative energy-saving software invented by Kasahara.

A group of engineers, led by Waseda, Hitachi and other leading companies, will then create a prototype that runs on solar cells that will use less than 70% of the power consumed by normal ones. The new CPU could still be able to function even when there is prolonged periods of power shortage during natural disaster, the Nikkei added.

Once standardized, the super Japanese CPU could be incorporated into different brands of televisions, digital cameras, and other electronic appliances. As the new CPU is equipped with a universal standard and software format applicable to different appliances, which could save the R&D cost of various electronic sectors, the Japanese chip alliance could also extend their dominance by selling chips to automobiles, servers and robots sectors, Nikkei said Thursday without citing sources of information.

Forming an alliance to improve efficiency and benefit from the mass scale of production, as well as to create a market niche, is a sensible strategy for Japanese chip makers as the global chip market has started to recover from a devastating long and dip sector slump.

Because the long-term prospects in semiconductors are challenging, Fujitsu is cutting down its capital expenditure and R&D spending for its chip division called Fujitsu Microelectronics. Fujitsu will not add any additional capacity on chip assembly, but instead rely on outsourcing its orders to
Taiwan Semiconductor Manufacturing Company
, according to a research report by Macquarie published last week. After a company visit, Macquarie estimated that Fujitsu could easily save up to 80 billion yen a year for more valuable uses, including investments in its IT infrastructure services businesses and strategic M&A.

By the same token, in seeking profitability and sustainable growth, Toshiba’s new president and CEO Norio Sasaki, also pledged in early August that the company may turn more conservative in capital budgeting or project decisions, with a shift towards the production of reactors instead of computer chips.